This paper explores how the sudden stop in capital flows to emerging market economies associated with the Covid-19 pandemic unfolded, the substantial policy responses that were needed to alleviate it, and the lessons we might draw from this episode. We identify four areas where further work...

This paper studies the sudden stop in capital flows that emerging markets experienced throughout the first months of the pandemic. First, we find that the sudden stop in capital flows was strongly affected by lower portfolio investments by non-bank financial intermediaries: for many emerging...

In this paper, we study the effects of structural shocks that influence global risk - the main factor behind a "global capital flows cycle" - and how risk, in turn, is transmitted to capital flows. Our results show that not all the risk shocks driving the global financial cycle have the same...

In this paper, we study the effects of structural shocks that influence global risk – the main factor behind a “global capital flows cycle” – and how risk, in turn, is transmitted to capital flows. Our results show that not all the risk shocks driving the global financial cycle have the...

We study the role and the interaction of the quality of institutions and of counter-cyclical policies in leaning against the Global Financial Cycle (GFC) in Emerging Economies (EMEs). We show that heteroegeneity in institutional strength is a key determinant of the different effects of the GFC...